WT Business Beat

By Nick Wakeman

Is IBM waving the white flag in battle for CIA contract?

IBM Corp. took a big step back this week from its battle with Amazon over a $600 million CIA cloud contract, withdrawing its request for an injunction.

IBM and Amazon have been battling for months, with Amazon winning the contract, and then IBM prevailing in the protest.

But Amazon filed suit in the U.S. Court of Federal Claims, arguing that the Government Accountability Office was wrong to hand the protest victory to IBM.

The court agreed with Amazon, and IBM threatened to appeal and asked for an injunction to stop Amazon from working on the contract.

But the CIA, through a filing by the Justice Department, said stopping work and delaying progress on the cloud solution would jeopardize national security.

That argument resonated with IBM, and Big Blue withdrew its request for the injunction.

“In light of the government’s recent submissions emphasizing its need to move forward on the contract, IBM has withdrawn its motion,” IBM spokesperson Clint Roswell told Washington Technology sister publication FCW. “IBM maintains its position that the GAO’s findings were appropriate.”

While they haven’t come out and said they won’t appeal, it’ll be next to impossible to un-ring this bell now that work is underway.

This has been an interesting battle on several fronts.

First, you have an established player -- IBM -- losing to a relative upstart -- Amazon.

You have Amazon firmly announcing to the world that they will pursue major projects as a prime. This win gives them an impressive addition to their resume.

Third, it’s a ringing endorsement for cloud computing. Of course, we don’t know exactly what the CIA will be doing, but we know it wants a highly secure and reliable environment in which to do it.

But the closing of this chapter still leaves plenty of unanswered questions.

Question one for me is what the CIA will be doing. We know it deals with collaboration and information sharing, but beyond that, details are sparse. I’m not sure if we’ll ever get much more than that.

I’m still very curious about Amazon’s teammates. They have to be partnering some companies with deep intell expertise and relationships with the CIA. Perhaps after the dust settles, we’ll get more on that. Who the teammates are also might give us some insights into what the CIA is doing in the cloud.

Lastly, and this applies regardless whether IBM or Amazon won the contract, will we ever get a sense of whether this project succeeds or fails? I’m not sure if we’ll ever get a full accounting of this project.

For now, though, the story is done. Amazon has prevailed. IBM will lick its wounds and some of its recent cloud victories will help in that regard.

But I don’t think this is last time we’ll see Big Blue and Amazon fighting it out.

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